It’s a commonly held belief that it pays to be loyal, but when it comes to your home loan it seems loyalty actually has us paying more. Billions of dollars more, if new analysis by online lender Athena is correct.
Athena’s analysis of Reserve Bank data suggests that Australian mortgage holders have forked out an estimated $9 billion in loyalty penalties so far in 2021. According to Athena’s CEO Nathan Walsh, this is because new home loan customers get offered better rates than existing customers.
As large as that $9 billion figure is, it’s even more mind-blowing at the individual level. Athena’s numbers reveal that the loyalty penalty rort could see the typical borrower with a $400,000 loan pay an extra $37,462 in interest over the life of the loan - or $1,249 extra per year.
“Aussie homeowners feel that their lender is taking advantage of them and are fed up,” Walsh said. “The loyalty penalty rort costs customers billions of dollars a year. We think it’s time for this practice to stop, and homeowners agree.”
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